By Jeph Ajobaju, Chief Copy Editor
Inflation rate dipped from 17.38 per cent in July to 17.01 per cent in August, the fifth consecutive monthly decline, but the latest 0.37 per cent points drop fails to reflect in the prices of consumer goods, just like the latest Gross Domestic Product (GDP).
GDP rose 5.01 per cent year-on-year (YoY) in the second quarter of 2021 (Q2 2021), in three straight quarters of growth after slumps in Q2 2020 and Q3 2020, according to the National Bureau of Statistics (NBS).
Claims of economic growth in Nigeria always contradict real life experience because, by all yardsticks, citizens have been getting poorer since Muhammadu Buhari mounted the saddle in Aso Rock six years ago.
Prices of food, housing, transportation, medical, and all of other human necessities have been rising every week – if not every day – since 2020. Millions are without jobs. Those employed are poorly paid.
When lives are not positively impacted, claims of economic growth or reduction in inflation cannot be genuine.
Month-on-month (MoM), the NBS said, inflation headline index rose 1.02 per cent in August or 0.09 per cent higher than 0.93 per cent in July, per Nairametrics.
Urban inflation increased to 17.59 per cent year-on-year (YoY) in August against 18.01 per cent increase in July, rural inflation rose to 16.43 per cent in August against 16.75 per cent rise in July.
Urban index rose 1.06 per cent in August, up 0.08 per cent points above 0.98 per cent in July, rural index jumped 0.99 per cent, up 0.12 per cent points above 0.87 per cent in July.
Food inflation
Food price inflation, a closely watched index that measures the rate of change in the prices of food items, dropped to 20.3 per cent in August against 21.03 per cent in July.
According to the NBS, the rise in the food index was caused by increases in the prices of bread, cereals, milk, cheese and egg, oil and fats as well as tea and cocoa.
The “All items less farm produce” or Core inflation – which excludes the prices of volatile agricultural produce – stood at 13.41 per cent in August, down 0.31 per cent points against 13.72 per cent in July 2021.
Central Bank Governor (CBN) Godwin Emefiele said at the 14th Annual Banking and Finance Conference on September 13 that declining inflation reflects several measures put in place.
CBN Monetary Policy Committee (MPC) has kept monetary benchmark rate constant at 11.5 per cent to expand the economy from the recession in Q3 2020.
Emefiele, however, said at the last MPC meeting that the committee had hoped for a faster moderation in inflation rate than recorded.
Inflation still high
Nairametrics explains that despite the decline in the rate of increase in the prices of goods and services, it is still high at 17.01 per cent.
It shows that the purchasing power of Nigerians is growing weaker and weaker, more so with the recent crash in naira exchange rate at the parallel market.